On May 3, the Second Circuit vacated on evidentiary grounds Jesse Litvak’s conviction – after a second trial – on a single count of securities fraud related to trades of residential mortgage backed securities (“RMBS”) and remanded the case to the United States District Court for the District of Connecticut.[1] This ruling is the latest setback for the government, as the Second Circuit in 2015 had vacated Litvak’s prior conviction on ten counts of securities fraud, one count of fraud against the Troubled Asset Relief Program (“TARP”), and four counts of making false statements to the government, following his first trial.[2]
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Canada Proposes New Deferred Prosecution Agreement Program
On March 27, 2018, the Canadian Government announced the introduction of legislative amendments to bring deferred prosecution agreements (“DPA”) to Canada. The legislation, which would create the “Remediation Agreement Regime” (“RAR”), follows a global trend. In recent years, DPA regimes have been introduced in the U.K. and France, and considered in a variety of other common law jurisdictions including Singapore and Australia. Although broadly patterned on an approach pioneered in the United States, like the statutory enactments in other countries adopted more recently, the Canadian RAR regime is likely to be considerably more structured and involve much more substantive judicial supervision.
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CLOUD Act Establishes Framework To Access Overseas Stored Electronic Communications
The 2018 Consolidated Appropriations Act, which was signed by President Donald Trump on March 23, 2018, included a little-debated provision that revised portions of the 1986 Stored Communications Act (“SCA”) to permit the government to access through the use of a warrant or subpoena stored communications held abroad by providers of electronic communications services that
China’s New Anti-Corruption Authority And Related Developments
This year’s annual meeting of China’s legislature, the National People’s Congress (“NPC”), brought forth a series of consequential changes that continue to push forward President Xi Jinping’s anti-corruption campaign while consolidating the President’s power through new party appointments and the elimination of the two-term limit, and streamlining government bureaucracies through the restructuring of several government agencies. Among the key changes was the creation of a new anti-corruption “super” agency, vested with broad powers to investigate and recommend for prosecution prosecute public-sector corruption throughout the country.
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Recent CFTC Enforcement Actions: Spoofing and Virtual Currency Task Forces
On March 14, 2018, U.S. Commodity Futures Trading Commission (“CFTC”) Chairman J. Christopher Giancarlo gave a speech at the Futures Industry Association (“FIA”) annual meeting in Boca Raton, Florida, in which he reviewed the CFTC’s activities during the past year and provided a preview of CFTC priorities for the coming year.[1] Among the issues addressed in Chairman Giancarlo’s speech were the CFTC’s successes and priorities in enforcement, including in particular initiatives in the area of anti-spoofing and virtual currencies.
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DOJ Announces Expansion of Approach Encouraging Self Reporting and Cooperation
On March 1, 2018, U.S. Department of Justice (“DOJ” or the “Department”) officials announced that the Criminal Division is expanding the applicability of a policy that encourages corporate self-reporting and cooperation for violations of the Foreign Corrupt Practices Act (“FCPA”) to reach other types of non-corruption criminal cases. Speaking at the American Bar Association’s National Institute on White Collar Crime in San Diego, John Cronan, Acting Assistant Attorney General for the DOJ Criminal Division, and Benjamin Singer, Chief of the DOJ Securities and Financial Fraud Unit, told attendees that the Criminal Division will apply the FCPA Corporate Enforcement Policy (the “FCPA Enforcement Policy”) as nonbinding guidance in cases other than FCPA cases.
The FCPA Enforcement Policy, which was adopted in November 2017, provided additional guidelines regarding the credit the Department will provide to companies that self‑report FCPA violations and then cooperate with the resulting investigation – including a presumption that self-reporting companies will not be criminally charged. Expanding use of the FCPA Enforcement Policy signals the Department’s perception of its success and a further effort by DOJ to encourage companies to self-report and cooperate. It also provides important guidance for companies faced with a variety of different types of investigations regarding the treatment they can expect, and tools to advocate before the Department for more favorable resolutions.
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The New Italian Law on Whistleblowing Procedures and Its Impact on Compliance Programs
Companies operating in Italy should take note of an important change in Italian law introducing more comprehensive regulations on whistleblowing procedures in the public and non-financial private sector. Among other relevant aspects, Law No. 179/2017, which entered into force on December 29, 2017, expands existing whistleblowing protections to the private sector, requiring companies that have adopted formal compliance programs pursuant to Legislative Decree No. 231/2001 (“Decree 231”) to also implement a formal whistleblower program.
Prior to Law No. 179/2017, only financial services and banking firms were required to implement formal whistleblower programs, pursuant to Italian legislation implementing European Directive 23/2013 (CRDIV). In addition, Law No. 190/2012, also called the “Anticorruption Law,” provided protection against retaliation for civil servants who reported the commission of a wrongdoing. Many companies operating in Italy have adopted formal compliance programs pursuant to Decree 231, incentivized by a provision that affords a defense against certain types of criminal offences for firms with such a program. Law No. 179/2017 requires such companies to integrate a formal whistleblower policy as part of their compliance programs.
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Supreme Court Clarifies the Scope of Dodd-Frank’s Whistleblower Protections
On Wednesday, the Supreme Court resolved a question that had created significant uncertainty concerning the scope of the anti-retaliation protections provided by Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”).
In Digital Realty Trust, Inc. v. Somers, the U.S. Supreme Court unanimously rejected the expansive interpretation of Dodd-Frank’s anti-retaliatory
Cross-Border Investigations: A Look Back on 2017, and Ahead to 2018
2017 was a year of transition and change in the world of cross-border investigations. In the U.S., the first year of the Trump administration brought questions about enforcement priorities and approach. In the U.K., the debate continued over whether lawyers’ work in furtherance of internal investigations enjoys privilege protection. Globally, new enforcement authorities stepped forward,
What To Look For In Proposed Singapore Deferred Prosecution Agreement (“DPA”) Legislation
On January 15, 2018, Singapore’s Law Minister, Kasiviswanathan Shanmugam SC, announced during an event held by the Law Society of Singapore a proposal for up to 50 different amendments to the city’s Criminal Procedure Code and Evidence Act, to include a procedure for Deferred Prosecution Agreements (“DPA”). The proposed legislation, if introduced, would make a significant change in the enforcement tools available to Singaporean prosecutors, and comes against a backdrop of an increasingly high-profile focus on corruption and anti-money laundering prosecutions.
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